Crude oil prices climbed above Rs 5,800 a barrel on the MCX, rallying to the highest level since October 2014 on surging demand, tight supplies and firm equity market.
OPEC and allies' decision to stick to the schedule to gradually hike production pushed the Brent price above $80 a barrel on October 4 and it moved above the 50-day moving average suggesting further upsides.
The energy commodity turned positive in the evening session after starting in the red, tracking an upbeat global trend.
On the MCX, crude oil delivery for October increased Rs 21, or 0.36 percent, to Rs 5,846 at 1645 hours, with a business turnover of 10,922 lots.
The delivery for November jumped Rs 16, or 0.27 percent, to Rs 5,836 with a business volume of 1,313 lots.
The value of October and November contracts traded, so far, is Rs 1,158.35 crore and Rs 37.30 crore, respectively.
West Texas Intermediate (WTI) crude rose 1.16 percent to $78.52 per barrel, while Brent crude, the London-based international benchmark, gained 1.29 percent to $82.31 per barrel.
“Crude oil prices extended gains rallying to three years high on fear of lower supply post OPEC plus decision. The OPEC+ said on Monday it would maintain an agreement to increase oil production only gradually, ignoring calls from the United States and India to boost output as the world economy recovers. Crude oil prices are expected to trade sideways to up with resistance at $80 and support at $76 per barrel. MCX Crude oil October has support at Rs 5720, resistance at Rs. 5860,” said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.
Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One Ltd said, OPEC and its allies sticking to the production schedule and increasing global demand would likely continue to support prices.
“Further supporting oil was the surge in natural gas prices across the globe, which would shift power producers away from gas. However, increasing power usage limitations in China and easing worries over a tight supply market might limit on oil prices,” he said.
The International Energy Agency (IEA) said demand for coal and natural gas exceeded pre-COVID-19 highs with oil closely trailing.
Markets will now look to cues from the inventories data starting with API data tonight and EIA data on October 6.
Crude has been trading higher than 5, 20, 50, 100, and 200-day simple moving averages and exponential moving average on the daily chart.
The momentum indicator Relative Strength Index is at 76.63, which indicates an upbeat movement in the prices.
Sriram Iyer, Senior Research Analyst, Reliance Securities
Technically, if WTI Crude Oil November trades above the $77, upside momentum could continue to the resistance at $78.10-$78.88. Support is at $76.40-$75.80 levels.
On the domestic front, if MCX Crude Oil October trades above Rs 5,800, the market could continue its bullish momentum to resistance at Rs 5,870-5,920. Support is at Rs 5,796-5,710.
Anand Rathi Investment Services
Crude may continue to trade with a positive bias as limited supply and higher demand will be supportive, especially after OPEC maintained the status quo on its output agreement. MCX Crude oil faces resistance at Rs 5,840-5,895, whereas support is at Rs 5,664.42-5,609.91.
For all commodities-related news, click here
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
